Operate and Grow Business - Business Plan

Effectively Operate andGrow Your Business

The Business Plan

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The Business Plan

Business Plan – Why?A plan raises your odds of success. The process forces you to take

an objective, critical, unemotional look at your project.The plan communicates your ideas to others and provides the

basis for your financial proposal.The finished plan becomes your operating tool and benchmark of

progress. (Are you working the plan and is it working?)

Business Plan - What? The business plan is a written document that describes your business

and your plan for running it…. This becomes your management blueprint, with frequent updating, throughout your business life.

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How is the Business Plan Used?

The plan answers questions such as:• Why do I want to be in business?• What business am I in?• Who are my customers?• What is the market condition?• How will I manage this business?• What are my financial needs?

These are key strategic issues

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BP Format and Composition

ESSENTIAL COMPONENTS– Executive Summary– Description of Products and Services– The Market– Marketing Strategy– Competition– Organization and Operations– The Management Team– Personnel– Financial Information– Timetables & Benchmarks– Supporting Documentation

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Executive Summary

An overview of your business– Business Description– Market Niche– Management Expertise– Sales and Profit Forecast – 3 to 5 years– Request for financing– Use of funds and repayment

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Business Description

Product or Services“Niche?”Customer Benefits

Management Organization Strengths and Weaknesses

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Elements of the Marketing Plan

• Target Market• Competition• Promotion / Advertising

Set budget, evaluate use of various media, measure

• Market Research

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Marketing Strategy

Target Customers Who are they, where are they, what are they buying, from whom?

Marketing Mix, the Four Ps:Price, Product, Place, Promotion

Competitive Analysis Market Research:

Market TrendsSales / ProfitabilityEconomic InterestsPopulation Shifts

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Competitive Analysis

Who are your major competitors?What are their strengths and weaknesses?What are their marketing strategies?What are the major trends affecting the

competitive environment?Industry, Economic, Social

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Public Relations

Network! Community InvolvementVolunteer InvolvementEvent Sponsorships

Send out press releases about newsworthy events(be creative about what’s newsworthy)

Give a seminar or presentation to relevant business groups

Submit articles to local media and to trade publications

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Low-Cost Promotion

Use every outgoing piece of paper, and every electronic document as business promotion (include company slogan, web address etc., email signature)

Offer a newsletter on your website to collect email addresses and stay in touch with customers and prospects

Use social media to advantageMeasure success of the various approaches, where feasible

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Management Team

– Experience and Quality– Personal history of the principals– Work experience– Management experience– Responsibilities

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Personnel

– Current personnel needs– Future needs– Skill requirements– Job descriptions– Available labor pool– Salaries and benefits

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Financial Information

– Financial Requirements How much do you need? How will you get it?

– Sources of Capital– Income Statement– Break-even analysis– Balance Sheet– Cash Flow

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Supporting Documentation

– Resumes– Credit Information– Quotes or estimates– Letters of intent from prospective customers– Personal references– Leases or buy/sell agreements– Legal documents relevant to the business

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Work the PlanTo beat the odds…• Select the right business [the one you know and have a passion for]• Know [research, learn] the market, customers and competition• Choose a viable market niche [avoid me-too and price cutting businesses]• Define your marketing strategy• Run a “back-of-the-envelope” break even assessment early in the game• DEVELOP A BUSINESS PLAN (A good business plan helps set you apart from the crowd)• Develop credible [realistic and substantiated] financial projections and a financial

model • Define the right legal business structure• Adequately capitalize the company [equity and debt financing]• Keep records and establish and accounting system from day 1• Hire develop & TRAIN good employees• Manage risk [insurance]• Effectively use cyberspace and conventional advertising• Attract and retain customers• Manage cash flow, manage cash flow, manage cash flow…daily!

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Learn to Make Adjustments

SCORE Counseling– CONFIDENTIAL

• Counselors abide by a code of ethics and honor confidentiality.– FAST

• Receive advice directly from an experienced executive.• Variety of Expertise available

– FREE• Offered free-of-charge, as a public service.• No limit on number of sessions• Available to all U.S. citizens & green card holders

– At downtown or satellite offices. Field counseling at your business' site.

– SCORE advice helps businesses succeed.– An application for personal counseling be found on the web @

www.scoreworks.org

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Step 8: Work the Plan and learn to make Adjustments

• Seek counseling, use mentors or sounding boards [leave pride at the door]

• Stay up-to-date, research, learn from your customers and competitors, continuously improve, develop an edge…

• Work on your business rather than just in your business

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Develop an Elevator Pitch

Elevator Pitch Objective:Someone who does not know your product would understand

in the time it takes to ride an elevator up to the second floor (30-45 seconds)

– State your business concept– What is it you do for customers?– How does the customer benefit?– Who is in your target market?– How can prospects be identified?

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